Working with non-EU sellers at Cross Border VAT has been fascinating this year. The IOSS landscape is changing rapidly, and what works in 2024 may not necessarily work in 2028. If you’re shipping from outside the EU to European customers, understanding where IOSS is heading isn’t just about staying compliant; it’s about planning your business strategy for the next three years.
Why does IOSS matter more than ever in 2025?
The Import One-Stop Shop system has matured significantly since its launch in 2021. What started as an optional compliance route is rapidly becoming essential infrastructure for non-EU sellers. We’re processing about 20-25 IOSS registrations weekly now, compared to maybe 5-8 per week in early 2024.
The numbers tell the story: IOSS handles billions in transactions for consignments not exceeding EUR 150, and European consumers have adapted to expecting transparent VAT-inclusive pricing. If you’re still shipping goods to Europe without IOSS registration, you’re essentially choosing to compete with a handicap.
But here’s what many sellers don’t realise: the current IOSS system is temporary. The European Commission has major changes planned for 2028 that will fundamentally alter how non-EU sellers access European markets.
What’s actually changing with ViDA and EU customs reform?
The big news is that the upcoming EU VAT Reform 2028, part of the VAT in the Digital Age (ViDA) initiative, will make IOSS nearly mandatory for businesses selling into the EU, effective July 1, 2028.
But it’s more complex than just “mandatory IOSS.” Here’s what we’re tracking:
The EUR 150 Threshold Is Disappearing
The European Commission proposed to take the EUR 150 threshold away and expand IOSS. This means IOSS won’t just be for low-value goods anymore; it could become the primary route for all non-EU sellers, regardless of shipment value.
Marketplace Liability Is Shifting
Non-EU sellers or platforms facilitating distance sales of imported goods will be made liable for import VAT and VAT on the distance sales of imported goods in the member state of the final destination. If you’re selling on Amazon or eBay, this affects both you and the marketplace.
Enhanced Anti-Fraud Measures
The EU is reviewing options, including IOSS sellers sending consignment data to Customs in advance for cross-checking, or the use of digital credentials by IOSS registrants to transmit supply chain data to Customs. Compliance is getting more sophisticated.
What does this mean for your business right now?
If You’re Not Using IOSS Yet
Honestly, you’re already behind. European customers expect VAT-inclusive pricing, and customs delays from non-IOSS shipments are affecting delivery times and customer satisfaction. We had a client switch to IOSS last month and immediately saw their European conversion rate jump 35% because checkout became transparent.
If You’re Currently Using IOSS
You need to start planning for the 2028 changes. From July 2028, sellers or platforms must pay VAT at the point of sale; customers can no longer be made liable. This eliminates some current workarounds and makes IOSS the clear choice for most sellers.
If You’re Selling High-Value Goods
The removal of the EUR 150 threshold opens IOSS to goods of any value. This could simplify your compliance significantly if you’re currently managing multiple VAT registrations across different EU countries.
How are the new requirements affecting registration?
Intermediary Requirements are Stricter
For non-EU sellers, an EU-based intermediary is mandatory. Companies outside the EU must find an intermediary willing to be jointly liable for their tax obligations. The quality of your intermediary matters more than ever.
We’re seeing increased scrutiny of IOSS intermediaries, with tax authorities paying closer attention to who they’re accepting as representatives. Choose poorly, and you could face registration delays or compliance issues down the line.
Documentation Standards are Rising
The EU is proposing unique ID numbers for IOSS reporting shipments from 2028 as part of enhanced tracking and fraud prevention. Your systems need to handle more detailed transaction reporting.
Fiscal Representation May Become Mandatory
IOSS fiscal representation may be imposed on non-EU sellers where they do not use IOSS. This means the alternative to IOSS registration could become significantly more complex and expensive.
What should non-EU sellers do right now?
Get Registered Before 2028
The transition period is going to be chaotic. Businesses that get their IOSS registration sorted now will have systems and processes in place before the 2028 changes take effect. Those waiting until the last minute will be competing for intermediary capacity during a rush period.
Review Your Fulfillment Strategy
With IOSS potentially expanding beyond EUR 150, your current fulfillment and inventory strategy might need adjustment. We’re working with clients to evaluate whether consolidating European fulfillment through IOSS-optimised routes makes sense.
Assess Your Technology Requirements
ViDA includes securing IOSS measures to allocate unique ID numbers to IOSS reporting shipments from 2028. Your e-commerce platform needs to handle enhanced data requirements and transaction tracking.
Plan for Marketplace Changes
If you’re selling on marketplaces, understand how platform policies will adapt to the new requirements. Marketplaces facilitating sales will be responsible for customs collections, but your obligations as a seller are also changing.
Are there industries or business models at higher risk?
High-Volume, Low-Value Sellers
If you’re shipping thousands of small packages monthly, the enhanced reporting requirements will significantly impact your operations. Start planning for automated compliance systems now.
Multi-Channel Sellers
Selling direct and through marketplaces creates complex compliance scenarios under the new rules. Your IOSS strategy needs to work across all channels whilst meeting enhanced reporting requirements.
Subscription and Recurring Billing
Subscription businesses face particular complexity with IOSS registration and the upcoming changes. Each shipment creates separate compliance events that need proper handling.
The strategic opportunity most sellers are missing
Here’s what we’re telling our clients: the 2025-2028 transition period is actually a competitive advantage opportunity. Whilst many sellers are waiting to see what happens, smart businesses are getting their IOSS compliance sorted now and building operational advantages.
European consumers increasingly expect seamless cross-border shopping experiences. The businesses that can deliver transparent pricing, fast customs clearance, and reliable delivery will capture market share from competitors still struggling with compliance.
We have clients who’ve restructured their entire European strategy around IOSS optimization. They’re not just compliant, they’re using compliance as a competitive differentiator.
What’s Next for IOSS and Non-EU Sellers?
The reform significantly raises the compliance bar for online retailers and marketplaces shipping from non-EU countries. But it also creates a more level playing field and clearer pathways to European market access.
The businesses that will succeed are those treating IOSS not as a compliance burden but as market access infrastructure. Getting registered early, building proper systems, and partnering with experienced intermediaries positions you for long-term success in European markets.
At Cross Border VAT, we’re helping non-EU sellers navigate both current IOSS requirements and prepare for 2028 changes. The transition is complex, but the European market opportunity for compliant sellers has never been bigger.
Ready to get your IOSS registration sorted before the 2028 changes? We handle the entire process for non-EU sellers and provide ongoing compliance support that adapts as regulations evolve. Let’s ensure your European expansion is built on solid compliance foundations.
